April 6, 2009 is truly a day I’ll never forget. Exactly one year ago the online retail company that I started (as a 50% owner) in 2006 was ripped out from under me. The company I created at the age of 26, that doubled in revenue for three straight years was being taken from me. With my wife due with our first child in less than one month and my house sold with no place to live,
Company Takeover Story
I found myself without a company, an income and a business identity that I dedicated years to build. I was living every business owner’s worst Nightmare.
To list what exactly sparked the disagreements might sound petty or even ‘High School’. My company went from two 50/50 owners who always agreed, to owners who couldn’t agree on if it was sunny outside. The only plan to make it work, despite the disagreements was for me to work from home. This plan was a decent band aide, but eventually tensions crept back up. Needing a solution, I finally decided to allow my partner to buy me out. In March of 2009, I came into his office, gave a short speech and listed my price I could be bought out for. His silence was deafening, yet the excitement of each partner moving towards a positive change seamed to fill the air.
There has been a theft
One month had passed from my proposal to buy my ownership stake and I had heard no word from my partner. Not a counter proposal or anything. Then it happened….April 6, 2009. Instead of a buyout my partner had different plans. I was working from my home office when I received a Skype message from my partner telling me to come into the office. “There has been a theft, you need to come in immediately.” It was a Monday and worst fears of an over the weekend break-in flashed through my eyes. I tried to ask my partner questions, but I only got rebuffed with, “Just get here as fast as you can, we need a team meeting to solve this theft.” I raced into the office to see my partner and two other key employees in the meeting room waiting for me.
“What happened, did someone break in?”, I asked. To which my partner stated, “No one broke in, you are a thief and I am removing you from the company.” Stunned, I just sat there as he went on to tell me, “Your pay will be stopped and your email address is turned off as of today.” I looked at him and said, “Why?! You can’t do that I’m a 50/50 owner.” If there was one mistake I made in my early entrepreneurial years, it was that I trusted too much. Legally, my partner could not kick me out, but I had given him the sole signer privilege on our checks and bank account. I had also allowed him full and only access to our e-mail admin panel of the website. Stupid, yes, but I had so many other responsibilities that I foolishly gave trust in two areas (Financial & Web) that no business owner should ever allow.
Answering my response, my partner stated, “We know all about, Yak About It and we feel you have stolen from our company to launch this endeavor. I am kicking you out on the grounds that you have breached fiduciary responsibility.” Yak About It (www.YakAboutIt.com) was a side project that I launched in my free time as a business venture to help get products made by inventors noticed. I cited how the side business was in a different industry and how it conducted solely in my free time. My partner had no interest in the truth or the facts. It then became clear to me that ever since my offer to be bought out, my partner had been working on a plan to have me kicked out at NO COST to him. He had no interest in a fair buy out, rather his goal was a hostile takeover.
Since I was 100% in the right, I was able, with the help of costly attorneys to get back into my company. Although I may have gotten back into the company, I was relegated to a powerless position with very little control. My lawyers said I had grounds to have the company shut down, but shutting down a company I worked so hard starting from scratch and growing to a success, seemed like a losing proposition.
4 Long months
From the time my attorneys got me back into the company to the time the business actually sold, were the longest 4 months of my entire life. The only thing that got me through the valuation process and dangling in a company I started, was great family support and a strong faith in God. The phrase; “God makes it straight with a crooked line” were the words that kept me going in the darkest days of having to fight for what was rightfully my company.
When the legally binding valuation hit (late summer 2009) I was stunned. It was only half of what I was told to expect. Forced to give up my first business for a nominal amount, I was left with little comfort.
My side project, Yak About It, launched two weeks after the official buy out occurred. To date, the company has been the spotlight of numerous DRTV companies and other product based firms as being a ‘minor league farm system’ for finding unknown inventions.
With Yak About It on the rise, I still couldn’t shake that itch to get back into the online industry that was pre-maturely taken from me. I loved the retail market of ‘College Supplies’ so in October 2009 (with no non-compete in place) I started to rebuild everything from scratch. Finally, on March 1, 2010 after five months of re-building, Dorm Co (www.DormCo.com) launched. With only one month of sales data, it is clear that Dorm Co is on the right path to be the College Dorm Supplies Superstore that I always envisioned to grow.
1 Full Year
It is now April 6, 2010 and if you asked me where I’d be after April 6, 2009, I would never have thought that I’d actually be grateful for my ex-business partner’s fateful actions. His actions, although wrong and challenging to deal with, have been a major catalyst in getting me to grow as a business owner and to launch two successful ventures in less than a year timeframe.
There is truly no substitute for hard work, family, friends, faith and a vision to succeed. Believe and God can ‘make it straight with a crooked line’.
Jeff Gawronski is the founder and CEO of both Yak About It (www.YakAboutIt.com) & Dorm Co (www.DormCo.com). Jeff first ditched the daily grind of corporate life after 3 years with Pfizer Pharmaceuticals at at the age of 24 and for the past six years has not looked back. Beyond being an addicted entrepreneur Jeff enjoys time with his wife (Heather), son (Cas) and just born on Easter Sunday (4/4/10), daughter (Ashlyn) in Western NY.